Introduction

The Conference of Parties, at is fourth session, decided to review financial mechanism of the Convention every four years in accorance with Article 11.4 of the Convention. The annex to decision 3/CP.4 containing the guidelines to the review of the financial mechanism that the review will also take appropriate measures regarding:

             (a) Its conformity with the provisions of Article 11 of the Convention;
             (b) Its conformity with the guidance of the Conference of the Parties (COP);
             (c) The effectiveness of the activities it funds in implementing the Convention;
             (d) Its effectiveness in providing financial resources on a grant or concessional basis, including for the transfer of  
                   technology, for the implementation of the Convention's objective on the basis of the guidance provided by the COP;
             (e) Its effectiveness in providing resources to developing country Parties under Article 4.3 of the Convention.

Three reviews of the financial mechanism of the Convention have been conducted in the past.  The COP is expected to complete the fourth review at its fifteenth session in Copanhagen, based on the previous guidelines and additional guidelines agreed in At COP 13 in Bali (decision 6/CP.13).  The annex to decision 6/CP. 13 provided that the additional objective of the review of the financial mechanism is to examine how to facilitate consistency in financing activities and how to improve the complementarity of
the financial mechanism with other sources of investment and financial flows, including:

             (a) Examining relevant sources and means of financing, as indicated in Article 11, paragraph 5 of the Convention, that
                   would assist developing countries to contribute to the achievement of the objective of the Convention, in particular
                   innovative means of financing, such as for the development of endogenous technologies in developing countries;
             (b) Examining the role of the financial mechanism in scaling up the level of resources;
             (c) Assessing enabling environments for catalysing investment in, and the transfer of, sustainable technologies that
                  mitigate greenhouse gas emissions, and for enhancing resilience to climate change.

The Conference of Parties, at its fourteenth session held in Poznan, requested the SBI, in accordance with decision 2/CP.12, to prepare a draft decision on the 4th review of the financial mechanism for adoption by the COP at its fifteenth session. At SBI 30 (June 2009), Parties considered the draft decision but was unable to complete the work. SBI decided to continue consideration of this issue at SBI 31 (December 2009). It also invited Parties to submit to the secretariat their views on the operation of funds under the GEF, as an operating entity of the financial mechanism as well as the Special Climate Change Fund (SCCF) and the Least Developed Countries Fund, for compilation into a miscellaneous document to inform the fourth review of the financial mechanism.